SIOUX CITY, Iowa, Oct. 26 /PRNewswire/ --
Terra Industries Inc. (NYSE: TRA) today reported net income of
$6.2 million for the third quarter ended September 30, 2000, or $.08 per
share, on revenues of $252 million. For the comparable 1999 quarter, Terra
incurred a net loss of $16.9 million, or $.23 per share, on revenues of
$173 million. The improvement was due to higher selling prices and sales
volumes partially offset by higher natural gas costs. For the nine months
ended September 30, 2000, a net loss $14.3 million, or $.19 per share, was
incurred on revenues of $743 million compared with a net loss from continuing
operations of $49.4 million, or $.67 per share, on revenues of $585 million
for the comparable 1999 period. EBITDA (earnings from continuing operations
before interest expense, taxes, depreciation and amortization) for the quarter
and first nine months was $56.5 million and $107.0 million, respectively, in
2000 and $10.0 million and $31.3 million, respectively, in 1999.
The Nitrogen Products business realized operating income of $17.5 million
on revenues of $207 million for the quarter compared with an operating loss of
$16.9 million on revenues of $145 million for the comparable 1999 quarter.
Year to date, Nitrogen Products reported revenues of $640 million and
operating income of $19.3 million compared with revenues of $520 million and
an operating loss of $26.2 million in 1999.
Substantially lower industry-wide inventories in both North America and
Western Europe resulted in selling price increases during the 2000 third
quarter as compared to the 1999 third quarter as follows: nitrogen
solutions -- 50%, ammonia -- 52%, ammonium nitrate -- 12% and urea -- 57%.
Except for urea where supplies were curtailed because of the three-month
shutdown of Terra's Blytheville, Ark. plant, sales volumes were higher for all
products primarily because of industry-wide production curtailments.
Partially offsetting these price and volume gains was a 52% increase in
natural gas costs at Terra's North American nitrogen production facilities.
Terra's United Kingdom operations realized 2000 third quarter operating income
that was $12.9 million higher than in 1999 as a result of operating cost
improvements and higher selling prices and sales volumes. Forward pricing
contracts reduced Terra's North American Nitrogen Products and United Kingdom
2000 third quarter natural gas costs by approximately $18.1 million and
$6.3 million, respectively.
For the first nine months of 2000, selling prices increased compared to
the 1999 period by 21% for nitrogen solutions, 28% for ammonia and 34% for
urea. Ammonium nitrate prices decreased slightly compared to 1999 because of
the higher U.S. dollar exchange rate and sluggish prices in the early part of
2000. Terra's North American natural gas costs increased by 29%. Natural gas
costs for the first nine months of 2000 for Terra's North American Nitrogen
Products and United Kingdom operations were reduced by approximately
$34.9 million and $10.3 million, respectively, due to forward pricing
contracts. Operating income for the first nine months of 2000 at Terra's
United Kingdom operations was $14.0 million higher than in the 1999 period.
The Methanol business segment reported 2000 third quarter revenues of
$43 million and operating income of $10.0 million compared with revenues of
$29 million and an operating loss of $0.8 million in the 1999 third quarter.
The improvement was due to a 59% increase in methanol selling prices partially
offset by a 55% increase in natural gas costs.
For the first nine months of 2000, methanol revenues and operating income
were $97 million and $9.6 million, respectively, compared with revenues and an
operating loss of $62 million and $13.8 million, respectively, in the
comparable 1999 period. In addition to methanol selling prices and natural
gas cost increases of 41% and 27%, respectively, in the 2000 period, the 1999
period was adversely affected by a two-month shutdown of Terra's Beaumont,
Texas plant in early 1999 because of market conditions. The Methanol business
segment's natural gas costs for the 2000 third quarter and first nine months
of 2000 were reduced by approximately $5.3 million and $10.4 million,
respectively, due to forward pricing contracts.
Burton M. Joyce, President and CEO of Terra, said, "We are pleased to
report a profit after two years of losses. It has been a difficult period
since we sold the Distribution business and focused on the Nitrogen Products
and Methanol businesses. Terra employees worldwide have done an outstanding
job of operating plants efficiently and reducing costs during this very
volatile period.
"The recent large, rapid increase in natural gas costs is a major concern
for all North American and Western European nitrogen and methanol producers.
These increases have not permitted us to continue historical levels of natural
gas forward pricing for our North American operations. At September 30, 2000,
25% of Terra's expected natural gas requirements for the next twelve months
have been priced at about $61 million below the September 30, 2000 published
forward prices. This includes only 18% of the next twelve months' needs for
Terra's North American operations. Consequently, we will continue to minimize
inventories produced with high-cost natural gas. We are confident that our
financial condition, coupled with our focused people and excellent facilities,
will allow us to weather the natural gas markets over the next couple of
years."
Terra Industries, Inc., with 1999 revenues of $775 million from continuing
operations, is a leading international producer of nitrogen products and
methanol.
Information contained in this news release, other than historical
information, may be considered forward looking. Forward-looking information
reflects management's current views of future events and financial performance
that involve a number of risks and uncertainties. The factors that could
cause actual results to differ materially include, but are not limited to, the
following: changes in financial markets, general economic conditions within
the agricultural industry, competitive factors and price changes (principally
selling prices of nitrogen and methanol products and natural gas costs),
changes in product mix, changes in the seasonality of demand patterns, changes
in weather conditions, changes in governmental regulations and other risks
described in the "Factors That Affect Operating Results" section of Terra's
current annual report.
Note: Terra Industries' news announcements are also available on its web
site, http://www.terraindustries.com , and by fax at no charge by calling
800-758-5804, code 437906.
TERRA INDUSTRIES INC.
Summarized Results of Operations
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
(in thousands, except per
share amounts) 2000 1999 2000 1999
Revenues
Nitrogen products $206,996 $144,606 $639,575 $519,904
Methanol 42,710 28,569 96,995 62,133
Other, net of
intercompany
eliminations
1,934 303 5,960 3,365
$251,640 $173,478 $742,530 $585,402
Operating income (loss)
Nitrogen products $17,506 $(16,884) $19,318 $(26,237)
Methanol 9,974 (801) 9,561 (13,785)
Other expense -- net (1,102) (175) (4,739) (4,180)
26,378 (17,860) 24,140 (44,202)
Interest income 1,231 255 2,090 7,463
Interest expense (12,981) (12,495) (38,684) (38,070)
Minority interest (985) 2,043 (5,360) (7,585)
Income tax provision (7,447) 11,150 3,563 32,950
Income (loss) from
continuing operations 6,196 (16,907) (14,251) (49,444)
Loss from discontinued
operations:
Loss from operations,
net of taxes -- -- -- (5,800)
Loss on disposition,
net of taxes -- -- -- (4,724)
Income (loss) before
extraordinary items 6,196 (16,907) (14,251) (59,968)
Extraordinary loss on
early retirement of debt -- -- -- (7,295)
Net Income (loss) $6,196 $(16,907) $(14,251) $(67,263)
Income (loss) Per Share:
Continuing operations $0.08 $(0.23) $(0.19) $(0.67)
Discontinued operations -- -- -- (0.14)
Before extraordinary
items 0.08 (0.23) (0.19) (0.81)
Extraordinary loss on
early retirement of debt -- -- -- (0.10)
Net income (loss) per
share $0.08 $(0.23) $(0.19) $(0.91)
Weighted average shares 74,704 74,168 74,761 74,168
Because of the seasonal nature and effects of weather-related conditions
in several of its marketing areas, results of operations for any single
reporting period should not be considered indicative of results for a full
year.
TERRA INDUSTRIES INC.
Summarized Financial Position
(in thousands)
(unaudited)
September 30,
Assets 2000 1999
Cash and short-term investments $101,916 $5,555
Other current assets 233,682 339,983
Total current assets 335,598 345,538
Property, plant and equipment, net 919,258 1,009,893
Excess of cost over net assets of acquired
businesses 235,924 257,207
Other assets 56,836 80,418
Total assets $1,547,616 $1,693,056
Liabilities and Stockholders' Equity
Debt due within one year $5,968 $32,321
Other current liabilities 144,558 121,909
Total current liabilities 150,526 154,230
Long-term debt 469,101 477,550
Deferred income taxes 163,323 196,876
Other liabilities 50,197 83,070
Minority interest 108,629 103,668
Total liabilities 941,776 1,015,394
Stockholders' equity 605,840 677,662
Total liabilities and stockholders' equity $1,547,616 $1,693,056
TERRA INDUSTRIES INC.
Summarized Information
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
Other Financial Data
(in thousands)
Cost of sales
(includes
depreciation &
amortization) $215,221 $176,636 $679,086 $590,284
Selling, general and
administrative expense
(includes
depreciation &
amortization) 10,289 14,492 39,852 39,785
Depreciation and
amortization 29,923 25,566 86,147 75,586
Capital expenditures 4,967 5,343 11,019 32,056
Volumes, Prices and Costs Three Months Ended September 30,
2000 1999
Sales Average Sales Average
(quantities in thousands) Volumes Unit Price Volumes Unit Price
Ammonia (tons) 311 $175 303 $115
Nitrogen solutions (tons) 887 87 794 58
Urea (tons) 69 149 114 95
Ammonium nitrate (tons) 283 128 189 114
Methanol (gallons) 68,551 0.62 74,121 0.39
Natural gas costs: (A)
North America $3.56 $2.34
United Kingdom $1.82 $1.76
Nine Months Ended September 30,
2000 1999
Sales Average Sales Average
(quantities in thousands) Volumes Unit Price Volumes Unit Price
Ammonia (tons) 1,130 $153 1,120 $120
Nitrogen solutions
(tons) 3,066 75 2,698 62
Urea (tons) 353 131 428 98
Ammonium nitrate (tons) 819 114 624 115
Methanol (gallons) 200,017 0.48 184,260 0.34
Natural gas costs: (A)
North America $2.97 $2.31
United Kingdom $1.95 $2.08
(A) Per MMBtu. Includes all transportation and other logistical costs
and gains or losses on financial derivatives related to natural gas
purchases.
Because of the seasonal nature and effects of weather-related conditions
in several of its marketing areas, results of operations for any single
reporting period should not be considered indicative of results for a full
year.
SOURCE Terra Industries Inc.
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http://www.terraindustries.com
Company News On-Call:
http://www.prnewswire.com/comp/437906.html or fax,
800-758-5804, ext. 437906
CONTACT:
Mark Rosenbury of Terra Industries Inc.,
712-279-8756
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